On April 10, 2025, the staff of the SEC’s Division of Corporation Finance (the “Staff”) issued a Staff statement providing guidance on how existing disclosure requirements apply to offerings and registrations of crypto asset securities.
This nonbinding statement—the latest in a series of SEC crypto-related pronouncements—aims to clarify how issuers of crypto asset securities should “come in and register” their offerings under the federal securities laws.
It comes on the heels of recent SEC staff positions carving out certain meme coins (February 27), proof-of-work mining arrangements (March 20), and fully USD-backed stablecoins (April 4) as not involving securities transactions.
The April 10 statement squarely addresses crypto assets that are securities, emphasizing that offerings and registrations of such crypto assets must comply with existing disclosure requirements.
Notably, the Staff explicitly identifies that nothing in this guidance suggests that crypto assets that are not securities must be registered. In other words, if a crypto asset fails to meet the security definitions under the Reves “family resemblance” test, the Howey test, or related case law and other Commission statements, the SEC’s registration regime would not apply by default. For those crypto assets that do constitute securities, the Staff’s message is clear: there are no “free passes”—issuers should follow the well-worn path of securities registration, augmented with crypto asset-specific disclosures. This stance reflects a shift in tone and approach from how the SEC addressed questions of how the securities registration process applied to crypto assets, signaling a willingness to engage with crypto asset projects seeking compliant paths to market.
Staff Observations and Views on Crypto Asset Disclosures
The Staff statement does not create new rules but highlights how existing disclosure requirements under Regulation S-K (which sets forth required disclosures in Securities Act registration forms such as Form S-1), Form 20-F (used by foreign private issuers), and Form 1-A (used for smaller offerings under Regulation A) apply to crypto asset securities offerings. The Staff outlined its observations and views on disclosures provided in response to these existing disclosure requirements:
- Description of Business. Issuers should provide disclosures tailored to the business done and intended to be done in clear and understandable language, without over-reliance on technical jargon. Such disclosures may include the objectives, underlying technologies (including any related intellectual property rights), operational mechanisms (such as consensus mechanism, transaction fees (also known as “gas”), and validation processes), governance systems, as well as security measures of a network or application. Issuers should also avoid descriptions of networks, assets or technologies that are not specific or material to the issuer’s current or proposed business, distinguish clearly between existing functionality and future plans, and ensure consistency with other public statements and promotional materials, such as technical white papers and developer documentation.
- Risk Factors. Issuers should provide robust, specific risk disclosures related to the security and the issuer’s business. This may include risks relating to technology and cybersecurity (e.g., smart contract bugs, network attacks, and reliance on another network or applications), risks relating to the security (e.g., volatility, liquidity, supply, custody, as well as rights of holders or lack thereof), and legal/regulatory risks (e.g., applicability of money transmission, commodities or banking laws).
- Description of Securities. Issuers should consider how the disclosure requirements apply in the context of a security in the crypto asset markets. The SEC provided the following examples:
- Rights, obligations, and preferences: disclosures may address rights with respect to transactions that impact the issuer or the network (such as network forks or other similar events); how the issuer intends to comply with applicable proxy rules; any restrictions on transferability; how the crypto asset can be accessed, redeemed, retired, or burned; and how are such rights memorialized.
- Technical specifications: disclosures may provide information on the network or application used; modification procedures for the underlying code; asset divisibility; technical requirements for wallets and keys; any network transaction fees and who is responsible for such fees; and whether such technologies have been subject to third-party audit.
- Supply: the Staff also highlighted disclosures related to the crypto asset’s total supply and issuance mechanics—how the crypto asset is minted or burned, vesting schedules, lock-ups, and any arrangements with market makers or trading platforms to support liquidity.
- Directors, Executive Officers, and Significant Employees. Even if a crypto venture does not have traditional executive officers or directors (“D&Os”), equivalent disclosures should be provided for anyone performing key policy-making functions typically performed by D&Os. Further, if a third party is performing functions typically performed by D&Os, disclosure on that third party may satisfy the applicable disclosure requirements—an example cited by the Staff is that of a crypto trust with a sponsor where the D&Os of the sponsor perform functions analogous to D&Os of the crypto trust. In such a case, the Staff indicated that disclosures with respect to D&Os of the sponsor could satisfy the requirement. Disclosure may also be required on fees paid to the third party for performing such functions, like executive compensation disclosures provided by a traditional issuer.
- Financial Statements. As with any offering, appropriate financial statements (including audited financial statements if required) must be provided. The Staff encourages early consultation with the SEC’s Office of the Chief Accountant for novel accounting issues (e.g. how to value reserves, forked assets, or revenue from sales).
- Code Exhibits. If the rights and obligations of holders of the securities are embodied in smart contracts or otherwise contained in code, the code may be filed as the instrument defining the rights of security holders as an exhibit. Issuers should be prepared to update such exhibits if the code governing the crypto asset changes over time.
The Staff’s statement stressed that the above are illustrative examples—each issuer’s disclosures should be tailored to its own facts. By outlining these areas, the Staff is signaling the level of detail and crypto-specific context it expects from digital asset securities prospectuses or offering circulars. In practice, a crypto asset issuer preparing an SEC filing should think like a public company, describing not just the technology and tokenomics, but also its business, risks and financial conditions in a manner accessible to investors.
Implications for Market Participants
The Staff guidance on crypto asset securities offering disclosures is another step in the SEC’s resetting of its regulatory approach to tackling the application of the securities laws to crypto assets. The statement applies existing disclosure requirements that apply to all public offerings of securities to crypto assets. Although the Staff statement should not be viewed as groundbreaking, it does serve as an important confirmation of the Staff’s perspective on a pragmatic application of existing disclosure requirements as the SEC works towards a more comprehensive regulatory framework for crypto assets.
Importantly, the Staff statement does not provide clarity on what crypto assets are securities or advance the discussion of a new framework for how to define this question.
Looking Ahead
The Staff statement is another step in the Commission’s efforts toward a more comprehensive crypto asset regulatory framework. Commissioner Hester Peirce praised it as “a small step” toward ensuring investors get material information about crypto asset projects. It underscores that creating a new regulatory framework for crypto assets is firmly within the SEC’s jurisdiction and that the Commission is moving deliberately toward this reality.
Notably, Congress is also actively debating digital asset legislation that could provide a new regulatory framework for crypto assets.
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